• Feb
  • 05
  • 2014

Deductions from Salary Income For FY 2013-14 / AY 2014-15

Raghav Sharma

The deductions from Salary for Financial Year 2013-14 are the following:

1.       Entertainment Allowance:

Entertainment Allowance deduction can be claimed from salary income. Entertainment Allowance is first included in the salary of the employee and a deduction is allowed for Government employees for a sum equal to 1/5th of the salary* or Rs 5000 whichever is less.
*Salary here excludes all allowances, benefits and other perquisites

2.       Professional Tax

As per Section 16(iii) deduction is allowed for any tax on employment paid by the assesee to the state under Article 80C 276 of the constitution.

3.    Deductions Permissible under Chapter VI-A

 Certain deductions are available from the gross taxable income, under sections 80C to 80U (Maximum upto Rs 1,00,000). Important deductions are:

I. Deposit/Contribution to Life Insurance Premium , deferred annuity, contributions to provident fund, subscription to certain equity shares or debentures, bank deposits under notified scheme, 5 years POTD, Senior Citizen saving scheme, etc. [Sec. 80C]

II. Contribution to LIC Pension Plan (Jeevan Suraksha) or Pension Fund of other insurance companies. [Sec. 80CCC]

III. Contribution to notified Pension Scheme by employees of Central Government or any other employer or by any other individual. [Sec. 80CCD]

IV. Investment in listed equity shares (w.e.f 1-4-2014) A.Y.2014-15 [or listed units of equity-oriented mutual funds] under Rajiv Gandhi Equity savings Scheme. [Sec. 80CCG]

V. Payment of Medical Insurance Premia (Mediclaim) or contribution to Central Government Health Scheme. [Sec. 80D]: Deductible upto a maximum of Rs. 15,000 (Rs. 20,000 in case the person insured is a senior citizen). Besides, an additional deduction upto Rs. 15,000 (Rs. 20,000 in case the person insured is a senior citizen) [The age limit for a senior citizen from A.Y.2013-14 is 60 years or more] shall be allowable in respect of medical insurance premium for parent(s).

VI. W.e.f. A.Y. 2013-14, deduction can also be availed for any payment for preventive health check-up of the assesses, his family and parents, subject to a limit of Rs. 5,000 within the aforesaid ceilings.

VII. Expenditure on medical Treatment etc. and deposit for maintenance of handicapped dependents. [Sec. 80DD]: A deduction is allowed to compensate for any expenditure incurred by an assesses, during a year, for the medical treatment (including nursing), training and rehabilitation of one or more handicapped relatives wholly dependent on him, and for amount deposited in an approved scheme of LIC or UTI, for the benefit of a handicapped dependent. A fixed deduction of Rs. 50,000 is allowable, in aggregate for any or both the purpose specified above, irrespective of the actual amount of expenditure incurred.

VIII. Expenditure  or Medical Treatment of assess/dependant relative [Sec. 80DDB]: Deduction for the amount of expenditure incurred or Rs. 40,000, whichever is less, is allowable for any year during which expenditure is actually incurred for the medical treatment of specified diseases or ailments for the assesses himself or a dependent relative. If the patient is a senior citizen the deduction allowable shall be the expenditure incurred or Rs. 60,000 whichever is less. Besides, any amount received under a medical insurance policy shall be reduced from the amount of deduction allowable.

 IX. Interest on Loan taken for Higher Education. [Sec. 80E]: Any amount paid by way of interest on a loan taken from any financial institution or any approved charitable institution for the purpose of pursing his higher education, is deduction without any limit.

X.  Interest on Loan taken for first residential house. [Sec. 80EE]: Deduction is allowable for interest on housing loan from a bank/housing finance company, for allowable is Rs. 1, 00,000, subject to specified conditions. The deduction is allowable for A.Y. 2014-15 and A.Y. 2015-16 only.]

   XI. Donation for Charitable Purposes [Sec. 80G]: There are a number of donations in respect of which deduction is permissible under Sec. 80G. Deduction @ 50% is available for donation to Jawaharlal Nehru Memorial Fund, Prime Minister Drought Relief Fund, [National Children’s Fund] Indira Gandhi Memorial Trust or Rajiv Gandhi Foundation etc. 100% deduction is allowed for donations to National Defence Fund, Prime Minister’s National Relief Fund, [National Children’s Fund,]National Foundation for Communal Harmony, Chief Minister’s/Lt. Governor’s Relief Fund etc. Deduction is granted subject to the prescribed maximum ceiling and on furnishing of appropriate certificate from the done organization.

*Donation of a sum exceeding Rs. 10,000 shall be eligible for deduction, only if it paid by a mode other than cash.

XII. Expenditure on Rent. [Sec. 80GG]: Rent paid by an assesses not owning a house and not in receipt of house rent allowance u/s 10(13A) for residential accommodation whether furnished or unfurnished, is deductible subject to the prescribed ceilings. [w.e.f 1-4-2014, for A.Y. 2014-15]

XII. Donations to specified institutions/associations for Research or for Rural Development [Sec. 80GGA]: Donation of a sum exceeding Rs. 10,000 shall be eligible for deduction, only if it paid by a mode other than cash.

XIV. Physical Disability [Sec. 80U]: Rs. 50,000 for disability and Rs. 1,00,000 for severe disability is allowed as deduction from the income.  


13 Responses to “Deductions from Salary Income For FY 2013-14 / AY 2014-15”

  1. sourav says:

    where to deduct professional tax i.e tax on employment in ITR 1

  2. NISHANT says:

    Hi

    I forgot to fill HRA detail in year end investment declaration. so HRA is not deducted in my form 16.So is it possible to declare HRA at the time of ITR filing.

  3. H. BANERJEE says:

    Deduction u/s. 88DDB from Total income of Rs. 40,000/60,000 (for Sr. citizens) for treatment of some specified disease like Malignant Cancer is on much lower side. In my case, the cost of Surgery alone was Rs. 6,26,910/- and the Total cost of treatment exceeded Rs. 10 Lakhs(including Chemoyherapies before and after Surgery). I am a Sr. Citizen without CGHS Scheme as the essential medicines prescribed are almost inadmissible in CGHS purview resulting in loss of time in running between the CGHS Dispensary and the Hospital for the treatment. Kindly use your good office to increase the limit of deduction from Total Income on this head suitably for the benefit of Tax Payers, especially, Sr. citizens.

    Moreover, the provisions prescribe attaching Hospital Certificate in Form No. 10-1 (Rule 11DD). But in case of e-filing no enclosure is allowed. This needs clarification.

    Thanks and regards. H. Banerjee.

  4. Chintan Bhatiya says:

    Shyam sir,

    1) You can Claim under Deduction u/s. 10(13A)for HRA (This is deducted from Gross salary under the Head of Income from Salary).
    2) If you have valid certificate from the Valid authority for your 60% severity you can claim Rs. 75,000. as deduction under Sec. 80U.

  5. shyam says:

    please tell me under which section I can claim HRA and TRANSPORT allownce rebate.Sir I am having severity 60% ,how much rebate i can claim under 80 U

  6. Dev Santani says:

    I agree and I apologise for deviating from main point. My focus was calculation for tax rather than TDS.

  7. Shaji says:

    Thank You Sir,

  8. Chintan Bhatiya says:

    Dev Santani sir,

    yes, 80TTA is deductable if there is interest income from saving account/post office upto Rs. 10,000 or interest received which ever is lower.

    But this article is related to deductions while calculating TDS on salary of employees under 192b. Thus income from other source is not considered while calculating TDS of employees… thus deduction under 80TTA is not mentioned in this post, According to me.. correct me if am wrong…

    Mushin sir, even i think the limit of 1,00,000 is only for 80c,80ccc and 80ccd(1). deduction under 80CCG is over and above of the 80c limit(i.e. 1,00,000).

  9. prem sagar kunde says:

    dear sir, this information in a nut-shell is more useful fr salary employees, as they need not refer entire statute book. thanks for the same. i may further state that in andhra pradesh, some of the assessing officers are adding back the deductions claimed under chapter vi-a, without giving any opportunity of being heard as required as per natural justice of law and raising a huge demand. even the person who is going to be hanged will be asked “WHAT IS YOUR LAST WISH?” but in our case, this simple law inot being applied. it is learnt that we should enclose the required certificates etc. when there is no provision to enclose along with ITR (BECAUSE IT IS ANNEXURE-LESS), for no fault of us, we are being harrassed. Is there any remedy for this, if so, pl. inform. hundreds aof assessees are receiving demand notices and asked to pay. having gone through the entire section of 143(1) of the IT Act, it is observed that there is no provision like this, EXCEPT correcting the arithematical errors or so. pl. suggest some remedial measures. thanks in advance.

  10. Chintan Bhatiya says:

    very useful post!! thank you Raghav!!

    Physical Disability [Sec. 80U]: the deduction is Rs.75,000 for disablility(not less than 50% but less than 80%) (not 50,000) and Rs. 1,00,000 for severe disability(not less than 80%) as per my knowledge!!

    Please correct me if am wroung…

  11. Muhsin says:

    sir
    is maximum deduction of Rs 1,00,000/- is u/s 80C to 80U or 80C to 80CCG, please clarify the things.

  12. Dev Santani says:

    Isnt the interest on bank deposits up to 10000 deductible from income.

  13. Dev Santani says:

    I think interest on bank deposits is deductible from income up to Rs 10000 from AY 1914-15

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